On January 1, 2019, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,598. During the first 11 months of the year, bad debts expense of $21,018 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2019, was $9,902.

Required:

a. What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.)

Bad debts write-Off

b. As the result of a comprehensive analysis, it is determined that the December 31, 2019, balance of the Allowance for Bad Debts account should be $9,302. Show the adjustment required in the journal entry format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the entry to adjust the allowance account to the appropriate balance.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1

c. During a conversation with the credit manager, one of Tabor's sales representatives learns that a $1,277 receivable from a bankrupt customer has not been written off but was considered in the determination of the appropriate year-end balance of the Allowance for Bad Debts account balance. What is the effect of write-off on 2019 net income?

multiple choice

• Increase

• Decrease

• No effect